With input from investors and other key stakeholders, the IIRC publishes a discussion paper for the
convergence of financial and sustainability reporting.

Despite still being in its relative infancy, integrated reporting has already become an important
issue for many sustainable institutional investors. The recently published 2011 Report on
Progress from the United Nations' Principles
for Responsible Investment (PRI) found that almost three-quarters of respondents to its annual
survey now ask companies to integrate environmental, social, and corporate governance (ESG) issues
into financial reporting.

The PRI report singled out the International Integrated Reporting Committee (IIRC) for
commendation, stating, "The ambitious mission of the IIRC is to create a globally accepted
integrated reporting framework which brings together financial, environmental, social and
governance information in a clear, concise, consistent and comparable format."

On the
other hand, PRI also accounted for concerns about such integration, observing that the interests of
key stakeholders other than shareowners may well require "granular information" that could be lost
in integrated reporting.

On Monday, the IIRC published a discussio
n paper on integrated reporting, in which it seemed to acknowledge the challenge, stating,
"Integrated Reports will meet the needs of a broad range of stakeholders. Initially, however, the
IIRC intends to focus the development of the Framework on the needs of investors."

Furthermore, despite the uptake of integrated reporting among sustainable investors and others,
the paper observes, "Few organizations, if any, however, could claim to have achieved the ideal of
Integrated Reporting."

According to the IIRC, the discussion paper includes input from
"international representatives from the business, investor, accounting and regulatory communities,
non-governmental organizations, standard-setting boards and sustainability experts." The paper lays
out five guiding principles and six key elements for an effective integrated report.

The
five principles outlined by the IIRC include strategic focus, connectivity of information, future
orientation, responsiveness and stakeholder inclusiveness, and conciseness, reliability and
materiality.

The six key elements to be included in an integrated report are
organizational overview and business model; operating context, including risks and opportunities;
strategic objectives and strategies to achieve those objectives; governance and remuneration;
performance; and future outlook.

To meet the challenges of developing tools with which to
analyze traditionally non-financial information, as well as encouraging a long-term outlook in the
investment supply chain, IIRC invited investors to take part in its Pilot Program. The program intends to inform the evolution
of reporting and investor practices, and drive convergence in international reporting guidance.

Mervyn King, Deputy Chairman of the IIRC and Chairman of the Global Reporting Initiative (GRI), stated, "Integrated
Reporting builds on the practice of financial reporting, and environmental, social and governance
reporting. It equips companies to manage their operations, brand and reputation strategically and
to manage better any risks that may compromise the long-term sustainability of the business."